Anyone into investing?

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8/27/2018 2:04 PM

I’ve been saving up a good bit the past few years and a retired guy was telling me I really need to invest in some mutual funds, etc... I’m way out of my realm, I don’t even know where to start honestly. Any advice?

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8/27/2018 2:53 PM

Buy land. Real estate. Invest in yourself.

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"Sorry Goose, but it's time to buzz the tower."

8/27/2018 3:13 PM
Edited Date/Time: 8/27/2018 3:18 PM

Mutual funds are a bit of a tough slog. Single digit returns most years if you aren't too aggressive. Luck of the draw if you are. Real estate isn't a given without proper research and some luck.

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8/27/2018 3:42 PM

Index fund. Read up.

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8/27/2018 3:50 PM

I have an IRA that I play with. Most of the stocks that I am invested are pretty hot and cold day to day, but the mutual funds have been showing steady growth. I put away about $100 per week to get to the max of $5500 per year.

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8/28/2018 5:47 AM
Edited Date/Time: 8/28/2018 6:19 AM

Mutual funds are typically a safe bet. They aren't going to make you insanely rich (overnight), but typically they have a nice steady gain. If you're younger, it's all about putting money away.... Just remember, at 8%, your money will double every 9 years.

ETF's are another option. Less operating costs than Mutual Funds, but are still safe, compared to individual investing.

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The message posted above is most likely my opinion and shouldn't be taken as fact....

8/28/2018 5:52 AM

Kelz87 wrote:

I’ve been saving up a good bit the past few years and a retired guy was telling me I really need to invest in some mutual funds, etc... I’m way out of my realm, I don’t even know where to start honestly. Any advice?

Invest based on age and (realistic) time til retirement.

Mutual funds can be relatively boring, even growth targeted funds, but systematic investing into good ones will probably be the most effective method of building some wealth for a relatively young person.

If you work for an employer who matches your input into a 401K, invest in that first (assuming that they have even a little bit of aggressiveness in their investment options).

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8/28/2018 6:32 AM
Edited Date/Time: 8/28/2018 6:32 AM

As explained above several times..mutual funds. Go walk into your local Edward Jones (or whoever) and open an account. They will ask you about your investment appetite (aggressive..mild.etc).

While I don't recommend dumping all your cash into stocks, but opening a Scottrade account (or whatever online) that allows you to purchase stocks can be fun. Take a $1000 and buy some stock. My good friend is a financial adviser and his recommendation is to buy stock in companies who sell products you're interested in.

Hard not to make money in the current economy/stock market.

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8/28/2018 7:41 AM

ETF's/Index funds are fairly practical passive investments that can build decent long term growth. For years, I had most of my money in a Fidelity 2050 life path position that returned steady returns YoY. Within the last few years, I have really taken the time to educate myself to understand investing/savings for retirement. One of the major discoveries that I made was that I was being way too conservative with most of my money in the 2050 position. If you are young, I am a firm believer in increasing the aggression of your investments because you have enough time to recover shall it be needed.

Today, I invest most of my money (70%) in index funds because they continually out-perform the 2050 position. 40% is in a fund that mirrors the S&P 500 index, 25% is in a small/medium cap stock index, and 5% is in an international stock index. I keep the remaining 30% in the 2050 position just because it is stable and decent growth. However, 90% of the time, the index funds have better % returns each day so my YoY is up compared to the 2050 position. I track my positions daily and have a very good understanding of how they perform against each other, yet I probably only make changes to my positions a few times per year.

Generally speaking, younger folks who can tolerate some volatility will want to hold more aggressive positions by investing in stock indexes. As you age, you will want to become more reserved and move away from the stock indexes and more into more stable positions such as bond indexes.

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8/28/2018 7:58 AM

And just remember...when you watch your portfolio on a daily basis, you're not actually 'losing money' when it goes down. wink You only lose money when you sell while it's down.

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The message posted above is most likely my opinion and shouldn't be taken as fact....

8/28/2018 7:59 AM
Edited Date/Time: 8/28/2018 8:02 AM

Brad460 wrote:

As explained above several times..mutual funds. Go walk into your local Edward Jones (or whoever) and open an account. They will ask you about your investment appetite (aggressive..mild.etc).

While I don't recommend dumping all your cash into stocks, but opening a Scottrade account (or whatever online) that allows you to purchase stocks can be fun. Take a $1000 and buy some stock. My good friend is a financial adviser and his recommendation is to buy stock in companies who sell products you're interested in.

Hard not to make money in the current economy/stock market.

I really disagree with your advice about an average Joe trading stocks. It is such a bad idea. Buying stocks based on products that you're interested in....come on....that's pathetic! You cannot make any money (reliably) trading on news, emotions, or sentiment!

If you are going to trade stocks, you have to educate yourself. If you can't understand how to do the fundamental and technical research on a position, don't invest! It takes a lot of research to be able to understand what you are looking at to determine what's a good stock vs. bad stock. I would say it took me close to 1 year of studying and fake trading with theoretical money that i finally started to become competent enough that I know what I was doing.

My theory is that if you are going to invest in stocks, and you are not a day trader, you need to be purchasing stocks for a long hold. They are usually pretty safe, but you still need to educated yourself before investing. Start with the big name companies in the S&P 500 or DOW.



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8/28/2018 8:46 AM
Edited Date/Time: 8/28/2018 8:47 AM

Brad460 wrote:

As explained above several times..mutual funds. Go walk into your local Edward Jones (or whoever) and open an account. They will ask you about your investment appetite (aggressive..mild.etc).

While I don't recommend dumping all your cash into stocks, but opening a Scottrade account (or whatever online) that allows you to purchase stocks can be fun. Take a $1000 and buy some stock. My good friend is a financial adviser and his recommendation is to buy stock in companies who sell products you're interested in.

Hard not to make money in the current economy/stock market.

mxtech1 wrote:

I really disagree with your advice about an average Joe trading stocks. It is such a bad idea. Buying stocks based on products that you're interested in....come on....that's pathetic! You cannot make any money (reliably) trading on news, emotions, or sentiment!

If you are going to trade stocks, you have to educate yourself. If you can't understand how to do the fundamental and technical research on a position, don't invest! It takes a lot of research to be able to understand what you are looking at to determine what's a good stock vs. bad stock. I would say it took me close to 1 year of studying and fake trading with theoretical money that i finally started to become competent enough that I know what I was doing.

My theory is that if you are going to invest in stocks, and you are not a day trader, you need to be purchasing stocks for a long hold. They are usually pretty safe, but you still need to educated yourself before investing. Start with the big name companies in the S&P 500 or DOW.



Investing in companies products you are interested in takes news, emotion and sentiment out of the equation. Essentially you know way more about a company you're investing in, as opposed to just selecting random stocks (tech, bank..etc). For example, if Alta Motors was a public company I would buy their stock as I can see/understand the growing interest in their bikes and based on this I believe they will be growing substantially..



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8/28/2018 8:56 AM

I'm not "into it" but I've been onveeying for years. Thanks to the current pro-business atmosphere, I'm doing pretty good.

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No Signature.

8/28/2018 4:09 PM

I'm a financial advisor in Canada. The difference in cost between an ETF and a mutual fund is the cost of advice. If you feel like tackling your investment planning, tax planning, estate planning, retirement planning, cash flow planning on your own - ETFs are a great option. There are some online tools like Wealthsimple that can give you a free/low cost intro to those topics.

If you don't feel like tackling the above items, get a Certified Financial Planner to help you out, it's the highest designation in the industry. Most financial planners are going to charge a % of assets under management, either as a fee embedded within the investment where you don't see a transaction to pay the fee or as a separate fee based account where you do see a transaction to pay the fee (this applies whether they are dealing in individual securities or mutual funds, most will do a mix of both now). Though still rare, there are some CFPs providing fee for service accounts now. This is essentially a per-hour charge like you would pay an accountant or lawyer. You're typically on your own as far as executing the plan, or you write a cheque each year for your annual review.

There are good options available in both models. You've probably heard the Warren Buffet line about buying only ETFs and just ride the market. This can be effective for some people, however virtually every study out there has found that invesTOR return lags investMENT return. This is because the vast majoirty of people make poor choices with their money at times, especially during times of stress. This is when actively managed funds and an advisor can be especially helpful.

As a rule of thumb, I would suggest the active manager should be able to pay for him/herself. So if the difference in cost between an ETF and an actively managed mutual fund is 1%, the manager should be able to get gross returns of 1% better than the ETF, and net the same overall return to you.

As for the real estate option it can be great as well. But really the only reasons it might perform differently than stocks/bonds/funds is that a) most real estate "moguls" are hands on with their properties - they do the work themselves. And b) it is soooooooo much easier to leverage into the real estate market. You can walk into the bank with $20k in your pocket and walk out with a $400k property. While you can leverage other investments as well, there are typically a lot more rules, and the leverage ratios are much lower. You may also want to explore Real Estate Investment Trusts - REITS - which are essentially mutual funds for real estate.

Bottom line, if you're just getting started and are looking for help I'd recommend interviewing a few different advisors. Ask about fees, ask about services provided - if they aren't doing everything listed above keep walking -, ask about service structure. Make sure you will get a written financial plan. If they try and sell you something in the first meeting, that's a red flag.

Hope that helps!

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8/28/2018 6:07 PM

Short term, buy oil stocks. I know. Not popular. Still lots of upside though. I put in 10k on some oil stocks about two years ago. I'm up to 75k now. Almost enough to pay off my house. And that's with oil prices still depressed.

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8/29/2018 5:33 AM

Brad460 wrote:

Investing in companies products you are interested in takes news, emotion and sentiment out of the equation. Essentially you know way more about a company you're investing in, as opposed to just selecting random stocks (tech, bank..etc). For example, if Alta Motors was a public company I would buy their stock as I can see/understand the growing interest in their bikes and based on this I believe they will be growing substantially..



Which stock do you invest in then?

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8/29/2018 6:29 AM

Been about 15 years but I started day trading with $500. Buying and selling Pennie stocks and a couple big names every day. In 2 years that is what paid for the move from MD to Charlotte.

I had not been in my account for years and a couple months ago went in and I still have 1 pennie stock that went down down and 1500 shares is now 87 but it is selling at over $2.00 a share.

Big name Stock prices are crazy high now!

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